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Czech miner NWR launches capital review under pressure from weak coal prices.

January 26, 2014

Czech miner New World Resources (NWR) said it has launched a review into its capital structure citing persistent pressure on coal prices and an upcoming expiry of a EUR 100mn revolving credit facility. "The review will be focused on the Group's balance sheet and will consider all available options", NWR said in a statement on its website. The company, which has been battling falling coal prices and shrinking demand from steelmakers, has a debt of some EUR 825mn and it yet to secure an extension of the credit line that expires on February 7 . Majority shareholder BXR has indicated that it is ready to invest new equity capital into a revised and satisfactory capital structure. NWR also said that it has agreed lower coal prices for the first quarter of 2014. The average agreed price for coking coal deliveries in Q1 is EUR 91 per tonne, or 7% below the realised price in the fourth quarter of 2013. An average price of EUR 54 per tonne has been agreed for 80% of expected thermal coal production in 2014, a 4% decrease compared to 2013 realised price. The company said it is targeting full-year coal production and sales of 9-9.5 million tonnes, with 55-60% of coking coal and 40-45% of thermal coal in the sales mix. After announcing its plans for capital structure review, NWR shares fell to a five-month low on Jan 23 , Reuters reported. NWR, controlled by Czech billionaire Zdenek Bakala , announced a plan in July to sell some of its assets to stay competitive and return to profit. In December it completed the sale of its coke producing subsidiary OKK to Czech group Metalimex for EUR 95mn . It also said it will close its loss-making Paskov mine by the end of 2014 unless it secures state aid to prolong the mine's life. The company posted a EUR 48.5mn loss from continuing operations in Q3, after a record loss of EUR 315.4mn in Q2. Fourth-quarter earnings are due to be announced on Feb 13 .

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Source: IntelliNews - Weekly Reports

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